File No.09/18/2008-IR This AIC Is Issued for Dissemination of The
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TELEPHONE No. : 011- GOVERNMENT OF INDIA 24622495 AERONAUTICAL INFORMATION SERVICES AIC Aeronautical : VIDDYAYX DIRECTOR GENERAL OF CIVIL AVIATION Sl. No. 03/2019 E-Mail: [email protected] OPPOSITE SAFDARJUNG AIRPORT 28.01.2019 Fax 011-24652760 NEW DELHI-110003 File No.09/18/2008-IR This AIC is issued for dissemination of the directions of Ministry of Civil Aviation in their letter No. AV.20036/2/2019-AD dated 18.1.2019. (B.S. BHULLAR) Director General of Civil Aviation ISSUE OF AIC IN RESPECT OF AERONAUTICAL TARIFFS AT VISHAKHAPTNAM AIRPORT, FOR THE 1ST CONTROL PERIOD (01.04.2018 TO 31.03.2023) The Airports Economic Regulatory Authority (AERA), in exercise of powers conferred on them by section 13(1) of the Airports Economic Regulatory Authority of India Act, 2008, vide Order No. 38/2018-19 dated 09.01.2019 and corrigendum to order No. 38/2018-19 dated 11.01.2019 has determined the Aeronautical Tariff for Vishakhapatnam Airport for the 1st Control Period (01.04.2018-31.03.2023) as per the details given in Annexure-I of AERA’s Order No. 38/2018-19 dated 09.01.2019. The copies of the aforesaid Order and Corrigendum are enclosed herewith. 2. These charges shall come into effect on 01.02.2019 in the manner prescribed by AERA. ***** [F. No.. AERA/20010/AAI-Vishakhapatnam/CP-II/2016-17] Airports Economic Regulatory Authority of India Corrigendum to Order No. 38/2018-19 AERA Building, Administrative Complex, Safdarjung Airport, New Delhi -110003 :tiilte of Issue: 11th January, 2019 Airport Operator AirpO~~~~~~i~bil~dia Airport Visakhar>;atna'lJ,Airp6rt In the matter of Determination ~1gl!.~~~~~~tl'~~liTariffsin respect of Visakhapatnam Airport for the first Control Peri,()d(0,1·.()~.2Qla4131.03.2023) 1. The Authority vide Order nb:~g72(h8n'gidated 09.01.2019 determined the tariffs in respect of Visakhapatnam Airport, for the first control period (01.04.2018 to 31.03.2013. 2. In the aforesaid order date of implementation / effective date of order has been inadvertantly mentioned as "01.03.2019" instead of "01.02.2019" due to typographical error. 3. The Tariff Q~r9ii'~PPi"~,R~i; bYJg~.~ER~:'"t§4 V' ~irport for the period 01.02.2019 to 31.0@;~023 at'.t}ronexure+,1i;may '~~{ re I'bng with the general condition as given below: "All Tariff charges are C;""l-"U\.'!"l"Lq'u·.'.. " •. < ...•• ,. 3. The other terms No. 38/2018-19 dated 09.01.2019 shall remain By the Order of and in the Name of " Authority I '" ..---- eettra Sahu) AGM (Fin.) To Airports Authority of India Rajiv Gandhi Bhavan Safdarjung Airport New Delhi -110 003 Corrigendum to Order No. 38/2018-19 Page 1 of i File No. AERA/20010/AAI-Vishakhapatnam/CP-11I201 6-17 Order No. 38/2018-19 r ' 9th January, 2019 AERA Building Administrative Complex Safdarjung Airport New Delhi - 110 003 Order No, 38/2018-19 Page 1 of 73 Table of Contents 1. LIST OF ABBREViATIONS 3 2. INTRODUCTION 4 3. SUMMARY OF STAKEHOLDERS' COMMENTS ON CP NO. 23/2018-19 6 4. MULTI YEAR TARIFF PROPOSAL SUBMITTED BY VIZAG AIRPORT 7 " 5. METHODOLOGY FOR TARIFF CAbCUlJATION 9 . ' .. \ " . 6. 7. REGULATORY ~SSET BASE (RAB) AND DEPRECIATION 17 8. FAIR RATE OF RETURN (FRoR) ; ~ ;. ~ 34 . 'i 1/ . I • . r•. - . \ 9. OPERATION AND MAINTENANCE EXPENDITLJ RE 36 'i.tt, ,< . - : . I .\.:' , '0', !, 10. REVENUE FROM NON-AERONAUTICAbSERVlCES 40 ' f ~' ~ l~ .' .~ 0. ',;, .: , ... • i . • I· J" . 11. TAXATION : f..; 44 12. QUALITY OF SERVICE : ~ ~ 47 13. PRIOR PERIOD SHORTFALL 49 14. AGGREGATE REVENUE REQUIREMENT AND SHORTFALL COMPUTATION 51 15. TRUE-UP : ~ 54 16. REVENUE FROM AERONAUTICAL SERVICE'S ;..·.; 55 17. MULTI YEAR TARIFF PROPOSAL SUBMITTED BY VIZAG AIRPORT ~ 61 18. ANNUAL COMPLIANCE STATEMENT · 66 19. SUMMARY OF PROPOSALS 67 20. ORDER 69 Order No. XXi 2018-19 Page 2 of 73 1. LIST OF ABBREVIATIONS IRR Internal Rate of Return AAI Airport Authority of India Cost of equity ACI Airports Council International LO Liquidity Damages AERA orthe Airport Economic Regulatory m meter Authority Authority of India Mechanized Environmental MESS Aero Aeronautical Support Services AERA MoCA Ministry of Civil Aviation (Terms and Conditions for MoU Memorandum of Understanding Determination of Tariff Airport Guideli nes for Airport Operators) Multi Year Tariff Order Guidelines, 2011 : ."; I dated 28 February 2011 , Multi Year Tariff Proposal AMC Annual Maintenance Coo\(act . Non-Aeronautical Revenues ANS Air Navigation Service National Civil Aviation Policy 2016 ARR Aggregate Revenue RequirementNlPFP National Institute of Public Finance and Policy ASQ , rt S ' Q tlt ' . II . Airpo ervice ua I y .. f Non'-Aero Non-Aeronautical . " ATC Air Traffic Control OPEX Operating Expenditure \ " i ATM Air traffic movement J;I;{/"l " JP.,L. !~' Profit and Loss ' CAGR Ra ~f)ia. Compounded Annual 'Growth. ' Per annum CAPEX Capital Expenditure . PA ~ v~tem Public Announcement System CHQ Central Headquarters PAX Passenger(s) CISF Central Industrial Security Force PSF ' Passenger Service Fee Communication, Navigation CNS & Surveillance PV Present value Corporate Planning & CP&MS RAB Regulated Asset Base Management Systems Common User Terminal RHQ Regional Headquarters CUTE Equip,ment SCCTV Earnings Before Interest, Security Closed-Circuit Television EBITOA Tax, Depreciation arid . SO Security Deposit Amortisation SLM Straight Line Method EMO Earnest Money Deposit Electronic Private Branch Sq.m. Square Metre EPBX Exchange T.R. Stall Travellers Requisite Stall F&B Food and Beverages UOF User Development Fee Flight Information FIOS Display Systems USO US Dollars Vishakhapatnam FRoR Fair Rate of Return Vizag Airport Airport FY Financial Year w.e.f. with effect from GOAP Government of Andhra Pradesh XIBS X-ray Inline Baggage System GOI Government Of India YoY Year-on-Year Instrument meteorological IMC conditions INR or f Indian rupees Order No, XXI 2018-19 Page 3 of 73 2. INTRODUCTION 2.1. Visakhapatnam Airport ("Vizag Airport") is located in the city of Visakhapatnam, which is the major commercial center in the state of Andhra Pradesh. Vizag Airport is owned by INS Dega , a Naval Air Station of the Indian Navy and is operated as a Civil Enclave by Airports Authority of India ("AAI"). It commenced civilian operations in 1981 with one flight per day and presently is the busiest airport in Andhra Pradesh . 2.2. Technical details of Vizag Airport are given in Table 1. Table 1: Technical Details of Vizag Airport (r; ,\\ ~ ,,\!, 7.. ' r r: " ,'~ A, Particulars " Details I . , ... 'iT. :v ~ Total land area available 350.31 acres " .. .. Tota l built-up area of Existing area 21,9J8 .48.Sqtm. Integrated Terminal Expected to increi;lse'by 10,150 sq.m. on account of linear expansion Building (ITS) I . ~i [i II Runway Dimension oftl'le,runway strip 3170m x 150m Two runwa y§: '/ . c':\" Primary/ r;D c;i in nmway .( ~8/!10, ,3050m x 45 m) SecondarVrRunWay;,(OS/23r,2090m x 45m) used only by Indian Navy Apron Total numbEko fa,:jr0n' ; l5ays~ '14 Total apron bay area- 1,08,9EF Sq.m. this is inclusive of 56,610 Sq.m. (330m x 13-7rn :and150'r:n ><: 76 m) for 8 parking bays and 52,357 Sq.m . for 6 new parking bays which were completed and commissioned on September 2018 04 Apron Flood l.iqhts Taxiways Five taxiways: N1(130mx15m) N2 (130 m x 15 m) N3 (1'S3rn x 23m) N4 (187m x 23m) II N5 (365mx 23m) • I ATC The ATe is operational for 24 hours 'and manaqed by the Indian Navy Peak hour capacity Existing peak hour capacity for departure, arrival and transit is 400 domestic and 300 international passengers This Is projected to increase to 600 for domestic and 450 for international passengers after completion of linear expansion of terminal building Check-in Counter 20 domestic and international combined check-in counters, with CUTE facilities Additional 8 CUTE facilities will be available after completion of linear expansion Other Details One Category 7 Fire Station Aerodrome Reference Code is 4D Aircraft Suitability for A330 in Instrument Meteorological Conditions (IMC) Suitable for code C aircraft 2.3. Order No. XX/2016-17 Page 4 of 73 2.4. The Authority held a meeting on 10.12.2018 with the stakeholders to discuss the proposals in the Consultation Paper. 2.5. This order of the Authority takes into account the proposals of Vizag Airport, views expressed by stakeholders in the meeting, written submissions received from stakeholders and examination by the Authority with reference to its guidelines for airport operators. Order No. 38/2018-19 Page 5 of 73 . : 3. SUMMARY OF STAKEHOLDERS' COMMENTS ON CP NO. 23/2018-19 3.1. In response to Consultation Paper No. 23/2018-19, the Authority received several responses from stakeholders . The list of stakeholders, who have commented on the Consultation Paper is presented below. Table 2: Summary of stakeholders' comments S.No. Stake holder Issues commented 1. Government of Andhra Pradesh (GoAP) • Traffic Forecast Fair Rate of Return (FRoR) ~ . 6 p ;e r~ t i o n and maintenance expenditure , ~", ~ev ~rlu e from Aeronautical Services 2. Federation of Indian Airlines (FIA) 3. IOCl • Revenue from Aeronautical Services 4. HPCl • Revenue from Aeronautical Services 5. SAOA • Revenue from Aeronautical Services 3.2. The Authority has . carefully, considered . the comments made by stakeholders and has obtained the vieWs of Vizag Airport onthese comments. Jheposition of the Authority in its Consultation Paper No. 23/2018-19, issue-wise comments of the stakeholders on the Consultation Paper, response from Vizag Airport thereon, Authority's examination, and its decision are given in the relevant sections of this order. Order No. 38/2018-19 Page 6 of73 4. MULTI YEAR TAR IFF PROPOSAL SUBMITTED BY VIZAG AIRPORT 4.1.